Hawke's Bay home and outdoor retailers believe they exceeded expectations over the Christmas and New Year trading period, creating a healthy outlook for next year.
Paymark, which processes about 75 per cent of the country's electronic transactions, said figures for December showed that New Zealanders spent $4.6 billion, pushing the annual growth rate up by 3.4 per cent.
People splashed out on DIY building projects in December with growth in the wider building and home improvement sectors up 5 per cent for the month, the strongest growth recorded last year.
There was also considerable spending on footwear and clothing compared with the same time last year.
Paymark said the total number of electronic transactions for Hawke's Bay decreased by 1.2 per cent, from 2.57 million in 2010 to 2.54 million last year but the value of those transactions, or the amount of money spent, had increased 1 per cent.
Hawke's Bay people sank $131.1 million into spending in December compared with $129.8 million the previous year. The largest increases in spending were 7.7 per cent in Palmerston North and 6.9 per cent in South Canterbury.
Mega Mitre 10 managing director Stephen Rickets said the company's stores in Hastings and Napier had recorded healthy figures through what was expected to be a lean Christmas period.
"I don't think we particularly expected to do so well," he said. "We are still finding the market tough like all other retailers because it's unpredictable at the moment.
"But certainly we had a very good Christmas and it's very reassuring."
Mr Rickets said the weather would play a major part in whether all the stores in New Zealand continued to trade well - in terms of demand for outdoor furniture.
"On the building side of the business, it is very much an unknown because building permits look subdued but the retail side seems quite optimistic.
Hastings Freedom Furniture manager Wendy Tapscott said shoppers were redesigning their homes and looked for lounge suites, sofas and dining tables over the December and New Year period.
She said the Paymark figures were a good reflection of the retail sector in the past month.
"It looks a bit more active compared with the same time last year, however business is not easy by any means.
"But what has worked is that Freedom decided to match its Australian prices, which meant a 30 per cent decrease in stores from last September, to match our Australian counterparts."
Hastings' Danske Mobler store manager Raewyn Smith said outdoor furniture, dining and lounge furniture and bedroom furniture had been popular.
"We had a lot of people come in just before Christmas looking to either upgrade their homes, buying or moving into new homes around March or April this year," she said.
Ms Smith said the store had traded well since its introduction to the Hawke's Bay market late last year.